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Taking the Benefit out of Banker’s Babe’s Mouths.

by Anna Raccoon on October 5, 2010

Who’d a thought that Ed Militant would turn out to be the silent champion of the new Tory policy?

As a man whose own household is well heeled, whose name is not on his child’s birth certificate, but whose ‘sleeping partner’ is almost certainly earning over the £45,000 limit at which she will lose her child benefit, you might have expected him to trot out his party’s well rehearsed objection to means testing – even if it is means testing of the rich and wealthy – which is being ushered in by the back door. Not a peep, no word from the new leader of the Labour party. Perhaps he is just grateful that the Con-Dems did it for him – after all, he will have an extra billion to spend if he ever gets back in power – he is hardly likely to give it back to the bankers is he?

No word even from one of the vanquished also rans – David Miliband – who uniquely amongst those who stood for election and lost, has had his views sought out by the media pack more frequently than the new leader has. I cherish the studio anchor to interviewer exchange immediately after Ed Militant’s acceptance speech – ‘before you talk about the new leader’s (no name check!) speech, we have just heard that David Miliband is on his way to the station, can you tell us any more’? Priorities – David’s travel plans or the (nameless) new leader’s ideology………

Mumsnet and Netmums have received acres of publicity as their views have been sought on whether it is entirely fair that at the outer limits of the proposals, one or two single Mothers might be struggling by on £750 a week and have found the extra £20 a week contributed by their Polish ‘women what does’ to be ‘essential’. I have yet to hear any interviewer telling us that it is about time that Lady Camilla and her banker husband had their child benefit clawed back by whatever means….

There are other benefits to which the same technique should be applied.

The National Assistance Act of 1948 established an entitlement to statutory support for nursing care, social care, housing, and a raft of additional benefits for those who were not able to provide for themselves. It has subsequently been bolstered by a tranche of legislation that would take up half of this page if I were to list them all. It is a complex subject.

The level of assistance payable is calculated partly upon the length of time you are unlikely to be able to support yourself. Entirely logical. Those with terminal illnesses or lifetime disabilities should be able to expect the tax payer to stump up rather more than those who will be supporting themselves again in a few months.

A the top end of the scale the figures can be astronomical – where you are talking about 24 hour life time care for someone who is an infant at present. So it should be.

Except that some of those infants go on to become millionaires. Multi-millionaires in fact.

Not because their disabilities are more profound than another child’s, but because they can prove that it was ‘someone’s’ fault. Settlements for negligence during the birthing process which result in lifetime disability can easily run to £6 or £7 million pounds in today’s market.

Yet still, the local authority or rather the taxpayer, can be responsible for paying out thousands of pounds a week in providing care and benefits – for life. If a claimant’s needs are assessed by a local authority as being in the critical or moderate bands, the authority is obliged to meet those needs irrespective of their resources.

The reason for this is twofold. First that Judges – and here I quote The Honourable Mr Justice Leveson –

“Some judges also have an instinctive feeling that if no award for care is made at all, on the basis that it will be provided free by local authorities, the defendant and his insurers will have received an undeserved windfall.”

In other words, if the damages were calculated on the basis that care was free courtesy of the taxpayer, it would be the insurers who would benefit – so the damages are calculated on the basis that the claimant’s needs must all be paid for by the insurer – hence the £6 or £7 million.

Then a curious thing occurs – the £6 or £7 million is put into a personal trust vehicle over which the claimant has no direct control – either the Court of Protection in respect of those who have suffered some mental incapacity or a private trust drawn up by their personal injury lawyer – and voila! – Capital held in court or in a personal injury trust is disregarded and any income provided by periodical payments or derived from disregarded capital is also disregarded when calculating whether you have an ‘income’ in excess of the current benefit limits.

The end result is that although the insurer has paid for that care, the claimant still has the right to have it provided by the taxpayer free of charge.

It is provided at a generous level because the assumption is that you have no other means of supporting yourself – so much so that many claimants have no need to draw upon the monies paid in damages at all, and it simply builds up in their accounts awaiting eventual notification of their death at which point it is distributed to their heirs and beneficiaries.

This system is bleeding the NHS of money paid out for negligence claims, and bleeding the tax payer who is condemned to go on paying for the care.

The NHS should take over direct responsibility for meeting the care and living costs of those it is responsible for ‘damaging’ on a month by month basis, no more ‘lump sum’ payments, and no more ‘exception to means testing’ for claimants.

Well yes but George Osborne’s proposals on child benefit are ill thought out and actually won’t even work from a practical point of view.

The “outer limits of the proposals” are marginal tax rates that could potentially go as high as 1,000,000 percent, administrative chaos, overpayments running to thousands of pounds and utter confusion for claimants/recipients.

Regardless of the principle of it, the practical application is entirely ridiculous.